Anywhere but Thailand, a military coup combined with an economic contraction might have spurred a stock selloff, but shares there have surprised many analysts with their resilience.
“I’m shocked to see how resilient that market has been,” Ruchir Sharma, head of emerging markets at Morgan Stanley Investment Management, said, adding he has a slightly overweight position on the country.
Thailand’s SET index is up around 0.6 percent midday Friday, topping its pre-coup levels and clocking up a more than 15 percent gain so far this year.
“You’ve got the geographical sweet spot of being in the Mekong region. You’ve got a very vibrant manufacturing sector. Global growth is doing better and Thailand is plugged into that in terms of its global export cycle,” Sharma said. “But just the fact that the politics has been such a mess is something which has been a big negative.”
After more than six months of political protests and two days of martial law, Thailand’s army chief General Prayuth Chan-ocha declared the military had seized power in a coup last week. The elected prime minister, Yingluck Shinawatra, was removed from her role at the top of a caretaker government earlier this month.
Others also are looking on the sunny side of Thailand’s political turmoil.